FCI to extend half of private storage depot leases | The Financial Express

FCI to extend half of private storage depot leases

Under PEG scheme, grain storage capacity is created by private parties, the central warehousing corporation (CWC) and state government owned agencies for guaranteed hiring by the FCl.

FCI to extend half of private storage depot leases
The aim of the scheme, launched in 2008, is to ensure uninterrupted supply of grains under a public distribution system.

The food ministry has approved a policy to extend the leases for storage depots, built under the private entrepreneurs guarantee (PEG) scheme for grain storage by the Food Corporation of India (FCI), according to official sources. A 10-year lease period has recently lapsed in the case of almost half of the PEG capacity used by the FCI

The aim of the scheme, launched in 2008, is to ensure uninterrupted supply of grains under a public distribution system.

Under the policy, which provides of guaranteed hiring of the godowns by the FCI, around 9 million tonne (mt) capacity has been created in 465 odd depots. Leases of half of these capacities are up for renewal.

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The new leases will be for a period of 5 years in the grain procuring regions and 3 years in grain-consuming states, the sources said.

Under PEG scheme, grain storage capacity is created by private parties, the central warehousing corporation (CWC) and state government owned agencies for guaranteed hiring by the FCl.

The construction of godowns and investment is carried out by the private entities, CWCs, SWCs and other agencies.

FCI will carry out region-wise rehiring of storage facilities those who have completed 10 years guarantee period and tender will be floated across regions where these godowns are built under PEG scheme.

According to an official note, the decision to rehire grain storage facilities created after the expiry of a guaranteed hiring period by FCI wa the National Food Security Act (NFSA) and requirement for procurement of grains,’.

“The availability of stock under NFSA and Pradhan Mantri Garib Kalyan Anna Yojana (PMGKAY) can’t be compromised,” the note stated. “The storage charges of PEG godowns are generally lower than that of CWC godowns,” it stated.

Currently, the FCI has about 38.91 mt of storage capacity (1990 odd depots), out of which around 38% or 14.82 mt capacity (565 depots), the corporation owns. Rest of the storage depots, FCI hires from CWC (3 mt/160 depots), state warehousing corporations (9 mt/670 depots) – both without guaranteed hiring—and PEG (9 mt/565 depots) – with guaranteed hiring – and others.

FCI stores around 50 mt to 60 mt of rice and wheat at any given point of time. The grain stocks usually picks in the month of July. However due to implementation of free ration scheme –PMGKAY since April 2020 and sharp drop in wheat procurement this season because of decline in production, the grain stocks have dipped significantly.

The corporation is also building silos for storing wheat through a public-private-partnership mode and currently around 2.8 mt capacity silos are under various stages of construction. FCI aims to build close to 11 mt of silos capacity for storing wheat in the next four to five years. Silos ensure better preservation of food grains and enhances its shelf-life.

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